Empire wants to sue Party Gaming
While financial forecasters gave a somewhat clean bill of health for online gambling giant Party Gaming, former potential partner-turned-rival Empire Online’s financial future is being called into doubt following the announcement that after talks of a takeover of Empire by Party Gaming broke down Empire Online was planning legal action against Party Gaming. Empire Online, by the way, runs a “skin site”, using Party Gaming’s online poker software to power their own independent online poker rooms. Party Gaming isn’t taking the threat all that seriously, with the company’s Communications Director, John Sheperd, that “They’re (Empire Online) clutching at straws.”
Empire Online’s Head of Mergers and Acquisitions Andrew Burnett said Monday that “We’re not taking a decision to litigate lightly, but having taken that decision on good legal advice, then we will pursue it very vigorously.” Empire Online floated its shares on the London Stock Exchange earlier this year and has, since that time, lost nearly two-thirds of its market value. In trading on the LSE on Monday, Empire Online shares lost 12 percent in pre-market trade, but later recovered…and were flat at 63.5 pence by 9:41 a.m. Should Empire Online take online poker rival Party Gaming to court, online casino shares in general – not just for Party Gaming and Empire Online – could be adversely affected.
“Business mergers and takeovers are never a sure thing,” says one analyst. “It could be that Empire Online is lashing out after continuous analyses devalued the company from takeover bid to takeover big, in keeping with the lukewarm performance of the company’s stock in recent months. Online casino companies like Party Gaming and Empire Online are not alike. Party Gaming has the power, Empire Online doesn’t at the moment, and if Empire Online can get the money they feel they deserve in court rather than via a buyout…they will take their case as far as they can.”